Giuliani, who is on a visit to London, said he had discussed Iran with British Prime Minister Gordon Brown, former British premier Tony Blair and Israeli Prime Minister Ehud Olmert in the last few days.
The West suspects Iran is secretly developing atomic weapons but Tehran says its nuclear program is aimed solely at generating electric power.
“I believe the United States and our allies should deliver a very clear message to Iran … They are not going to be allowed to become a nuclear power — it’s just not going to happen,” Giuliani said.
He was answering questions at a fund-raising lunch chaired by Winston Churchill’s granddaughter Celia Sandys.
Giuliani, Republican frontrunner in the race to replace George W. Bush in the November 2008 election, said he rejected the view of some pundits that the West could afford to allow Iran to obtain nuclear weapons and then contain the threat.
“The policy of the United States of America should be very, very clear: We will use any option we believe is in our best interest to stop them from being a nuclear power.”
He said Washington should seek backing from its allies and put maximum pressure on Iran not to go down the nuclear path.
Washington should give “an absolute assurance that if they get to the point that they are going to become a nuclear power we will prevent them or we will set them back five or 10 years,” he added.
“If that really sinks in, there is a better chance we will never have to use a military option in dealing with them.”
Giuliani said he was heartened by how seriously Brown regards the Iran question.
Earlier on Wednesday, Iran said it would use “all our means” to defend itself if attacked by the West — three days after French Foreign Minister Bernard Kouchner publicly raised the possibility of war over Tehran’s disputed nuclear activities.
Western nations fear Iran is seeking to build atomic bombs despite Tehran’s denials. The Bush administration insists it wants diplomacy to end the row but has not ruled out military action should such a route fail.